And while we hear that buyers are withdrawing from the market because of higher interest rates and home prices -- as evident from the declines in mortgage purchase applications -- we also see the continued dominance of cash sales. Plus, inventory still continues to be in short supply.

But a look at the overall picture suggests that the housing market is neither crashing nor bubbling over. It is stabilizing and heading back to normal.

Here are takeaways from recent housing data.

Home prices are rising but gains are moderating: The S&P/ Case-Shiller 20-City Composite Index rose 13.3% year-over-year in September, the fastest annual pace since February 2006. The index was up 1% from the previous month on a seasonally-adjusted basis.

The Case-Shiller Index is based on a three-month moving average and is based on closed transactions. So this data is more of a lagging indicator. It also does not adjust for distressed sales such as foreclosures and short sales, which sell at a discount to the market price. Since foreclosure and short sales have declined over the past year, the gains in the Case Shiller Index may be exaggerated.

The LPS Home Price Index, which adjusts for distressed sales, showed a monthly gain of just 0.2% in September.